Flow General Inc.'s General Research Corp. subsidiary may be barred from bidding for defense contracts as a result of pleading guilty to federal conspiracy and corruption charges in May.
Flow, a McLean-based research firm and manufacturer of biomedical and research equipment, said yesterday that the Army advised GRC of the proposed debarment, which GRC said it will oppose.
The Army must make a determination within 90 days unless GRC requests additional time to present information in the matter.
In the meantime, no new defense contracts will be awarded to GRC without special exemption, Flow General said. However, GRC may continue to perform its existing defense contracts.
GRC, which is engaged in the design of sophisticated computer software, accounted for between 75 and 80 percent of Flow General's $40 million in defense-related revenues in 1981, a company spokesman said.
The subsidiary has several hundred employes and offices in scattered locations, including McLean, and Santa Barbara, Calif. Last year its management systems division held government contracts worth $10.7 million, with $8.9 million of it defense-related.
GRC was fined $30,000 last month in U.S. District Court in Alexandria for illegally buying inside information to help win a $2.6 million Army computer contract in 1980.
The contract for development of a computer software system to handle Army personnel records was awarded to GRC on Sept. 29, 1980. A competing firm's allegations of possible wrongdoing led to the investigation.
The court imposed maximum $10,000 fines on each of three criminal conspiracy and corruption charges against the firm.
Federal prosecutors dropped charges against five GRC employes and dismissed six counts of the original indictment in the case after GRC entered the guilty plea shortly before the start of a scheduled trial in May.
In its plea, the company admitted to a single conspiracy count. It also pleaded guilty to two counts of aiding and abetting a violation of a federal revolving-door statute, which restricts former government employes who enter private business, and aiding government employes in actions that affected their own and the firm's financial interests.
Federal prosecutors said in court papers in May that, in a trial, they would prove that two Army employes and three GRC officials conspired to help the company win the Army contract.
Prosecutors had contended that GRC improperly offered jobs and the promise of bonuses to two Army procurement officials who were closely involved with development of a servicewide computer system for assigning Army personnel.
The prosecutors also charged that both men accepted the job offers in August 1980, about a month before they left the Army and five weeks before the contract was awarded to GRC.
The government contended that, during the interim, the two officials disclosed confidential information concerning two competing firms' bids and helped GRC tailor its proposal to meet Army specifications.
One of the officials was considered the Army's in-house expert on the proposed system, prosecutors said at the time the plea was entered.